Reorganized brewer emerges from bankruptcy

Ten months after it filed for bankruptcy, the G. Heileman Brewing Co. has reorganized and emerged from the protection of the U.S. Bankruptcy Court, the company announced yesterday.

The remade brewer of regional beers ranging from Baltimore's National Bohemian to Texas' Lone Star will be smaller and have different owners than the old Heileman. Alan Bond, the Australian tycoon who bought the nation's fifth-largest brewer in 1987 and saddled it with $1.3 billion in debt, will keep only a 3 percent share.

Heileman, which is based in La Crosse, Wis., and employs 400 people at a brewery in Halethorpe, just south of Baltimore, has said it will sell off its LaCroix sparkling water and Champale brands to raise cash.

The reorganized company said it will owe only $325 million, which means that on average, the company's debts were settled for about 25 cents on the dollar. Some creditors did much better than others. Heileman's suppliers will get a series of payments that will eventually add up to 70 cents for every dollar Heileman owes them, according to attorneys in the case.

And holders of the $200 million in "junk bonds" Heileman had issued will get 18 percent of the reorganized company's stock. Early this summer, the bondholders appeared to be fighting reorganization attempts, charging the stock they were being offered was worthless.

Heileman's bankers, led by the Bank of Boston, will control a majority of the company's stock.

Brewery industry observers said the new Heileman, while improved by the reduction of debt, would still find it tough to succeed. The company will likely have trouble winning customers, while big, cash-rich competitors such as Anheuser-Busch and Coors flood television and radio with advertisements for their beers.

The changes made during bankruptcy "don't change the difficult and competitive market," said Jerry Steinman, editor of Beer Marketer's Insights.